Filtered by Subscriptions: UK Housing Use setting UK Housing
There are tentative signs that the housing market mini-boom is running out of steam. We think house price growth and transactions are probably close to their peak. As pent-up demand from lockdown is expended in the coming months, we expect house price …
2nd October 2020
We don’t think the surge in high-LTV interest rates signals an incoming credit crunch. Rather, it probably reflects lenders prioritising demand from less risky borrowers. As the surge from pent-up demand wanes in the coming months, we expect high-LTV …
18th September 2020
The housing market recovery has exceeded all expectations and we have substantially upgraded our 2020 house price forecast. But as pent up demand runs out, a weak economy, tight credit conditions and the end of the stamp duty cut will hold back further …
4th September 2020
Part of the eviction ban is due to end in September, and court ordered evictions are likely to surge as the backlog works through the system. Even so, evictions will remain small compared to the rental stock, meaning the impact on private rents is likely …
26th August 2020
Private housebuilding is constrained by the speed at which builders can sell homes at prevailing market prices, which planning changes will do little to change. As a result, the government’s proposed reforms may improve land supply and support SME …
20th August 2020
Global property markets are expected to see a lasting impact from the effects of the COVID-19 outbreak. Over the coming weeks, we will publish a series of pieces looking at the post-pandemic future across the main property types. We start this by …
15th July 2020
The latest stamp duty cut will bring forward some housing demand and, by increasing perceptions that the government is standing behind the market, the cut reduces the chance of a house price crash. That said, with the potential tax savings unable to …
13th July 2020
The recent withdrawal of high LTV products could impede as many as one in four prospective first-time buyers. More broadly, tighter credit conditions reinforce our view that, despite signs of a surge in demand, lending and transactions won’t recover their …
26th June 2020
Transactions in April and May have surprised on the upside. What’s more, there are signs that new demand in June has been stronger than expected. Of course, the economic damage from lockdown suggests that sales won’t sustain their pre-virus level anytime …
25th June 2020
The rental market data have been surprisingly resilient. But informal rent cuts may be happening under the radar, while government support has delayed the crunch point for households. As a result, we have pushed back our expected fall in rents to the end …
18th June 2020
The extended mortgage holiday scheme will cushion the blow for financially distressed households. Alongside the other financial support already available, it further reduces the chance of an immediate house price crash. But large downside risks to house …
22nd May 2020
Easing movement restrictions, combined with government support and strong underlying demand will allow housebuilding to bounce back fairly quickly. But weak occupier demand and falling capital values mean the recovery in commercial property construction …
15th May 2020
The ban on home buying activity has been lifted by the government. But a weakened economy, uncertainty and behavioural shifts from the coronavirus will hamper the housing market recovery. By the end of the year, we expect housing sales to still be well …
13th May 2020
Low transactions volumes have made house price indices volatile and inaccurate. Indeed, the ONS has suspended publication of the official UK House Price Index, while the Halifax and Nationwide data for April are wildly divergent. Looking ahead, we may …
11th May 2020
The data now point to two million households with mortgage holidays. This suggests that the peak in arrears may be much higher than during the GFC. But, with mortgage credit quality and banks’ financial positions better than in 2007, the outlook for …
5th May 2020
Unlike in previous downturns, residential property has not been the root cause this time. Even so, house prices will not escape this recession unscathed. If policy support proves effective, if lockdowns hamper property sales, and if demand rebounds later …
29th April 2020
A rising LIBOR OIS spread points to nervousness on interbank funding markets. But for the mortgage market, any future credit crunch is more likely to come from lenders’ concerns about the economy, house prices and risk appetite, than a dislocation in …
21st April 2020
The slump in housebuilder share prices reflects the coming collapse in housing sales, which will force builders to shut down production for several months. Indeed, we now expect housing starts to drop by 25% in 2020, with only a partial recovery by 2021. …
3rd April 2020
In light of government advice to delay housing sales, we now expect a 70% q/q fall in house purchase mortgage approvals and transactions in Q2. Meanwhile, our base case is that low interest rates, government support and lender forbearance will prevent a …
27th March 2020
The economic hit from the coronavirus will cool rental demand, while social distancing measures will tip market dynamics in favour of renters. We have downgraded our forecast for rents and now expect them to fall by 1% this year. But rents should recover …
25th March 2020
Banks will be slow to pass on the latest rate cuts, as the economic turmoil in Q2 puts them on the defensive. But as conditions start to normalise, mortgage interest rates will fall further, reaching 1.5% by the end of 2020. In response to the economic …
20th March 2020
We now expect the coronavirus to severely limit housing market activity this year, with transactions and house purchase mortgage approvals falling by 40% in Q2. That said, as long as any pick-up in unemployment is reasonably short lived, a house price …
18th March 2020
Coronavirus fears will cut short the housing market recovery, and we have reduced our forecasts for house price growth in response. What’s more, the risks to the market – particularly housing transactions – are now firmly on the downside. Recent months …
6th March 2020
In light of the accelerating spread of the coronavirus – and the economic disruption that is likely to follow – we are pulling down our GDP growth forecasts for Q1 and Q2 of this year. Growth is likely to rebound over the second half of the year, but most …
2nd March 2020
The next few months could see a modest jump in London house prices, and we have upgraded our forecast to a 4% gain for 2020. But with the house price to earnings ratio still exceptionally high, any recovery in the capital is unlikely to be sustained. Once …
25th February 2020
Leading indicators could be understating the coming recovery in housing sales. While we maintain our view that the recovery in transactions and lending will be modest, this suggests that the risks to our forecasts are on the upside. The housing market …
21st February 2020
The post-election housing market recovery is likely to last a few more months, and we have upgraded our 2020 forecasts in response. But the housing market fundamentals were unchanged by the election. As a result, we expect the surge in activity to subside …
14th February 2020
Rising owner occupation in part reflects government policy – tax hikes on buy-to-let landlords and support from Help to Buy. As a result, landlord taxation is unlikely to be eased anytime soon. And it suggests that Help to Buy will probably continue …
3rd February 2020
Lower than expected interest rates would do little to boost house prices. After all, a shallower path for Bank Rate would reflect weaker than expected economic conditions. And in any case, there is only limited scope for further rate cuts, while mortgage …
10th January 2020
Political uncertainty has eased following the election result, but the housing market fundamentals leave little room for a recovery in price growth or transactions in 2020. Combined with waning support from Help to Buy, weak housing market conditions will …
16th December 2019
Labour and the Conservatives have pulled their punches on housing policy. Indeed, only Labour’s pledge to boost social housing construction would materially affect the market. As a result, we expect the outcome of the election to have little impact on …
29th November 2019
With housebuilders already close to capacity, the sector will struggle to sustain a further surge in output. As a result, if elected, we think Labour would likely to miss their manifesto commitment to build 150,000 council and social homes per year by the …
22nd November 2019
Housing completions have reached their highest level in over three decades. But timelier data on housing starts point to a weakening pipeline of construction. On that basis, we think housing completions could fall by 10% over the next three or four years. …
15th November 2019
The Brexit extension and general election leaves the housing market outlook even more uncertain than a week ago. What’s more, given the vast distance between the two main political parties’ approach to the housing market, the December election could prove …
1st November 2019
London has led the fall in housebuilding, but more recently, construction has fallen sharply in nearly every region. Looking ahead, given continued economic uncertainty, housing starts are on track to see a sizable fall in 2019 – regardless of Brexit. But …
16th October 2019
Increased competition among lenders has caused mortgage interest rates to fall in recent months. But funding costs are set to remain pretty stable. That, combined with already tight interest margins and increased regulation, leaves limited scope for rates …
20th September 2019
Stamp duty changes previously hinted at by the Prime Minister could affect over half of all home buyers, with more expensive homes seeing substantial savings. While the effect on house prices would be minimal, it could provide a modest boost to …
19th September 2019
After spending much of the last year as an outlier, IHS Markit has fixed the Halifax index. In line with the other main measures, the index is now recording sluggish house price growth. And with the usual month-on-month volatility now greatly reduced, the …
6th September 2019
Labour’s proposed Right to Buy scheme for private tenants could have severe unintended consequences. The supply of property available to rent would fall, pushing up rents across the board. Moreover, if rented homes could be bought for a discount, the …
2nd September 2019
Accelerating wage growth has lowered the house price to earnings ratio, even as house prices themselves have continued to climb. Indeed, London has already seen an 11% drop in earnings-adjusted prices. Looking ahead, we expect wage growth to drive a …
22nd August 2019
The era of sustained, rapid house price growth appears to be over. But even so, the cost of owning a home is still favourable compared to renting and is likely to stay that way. That suggests that households’ strong preference for owner occupation will be …
19th August 2019
London’s rental market is shifting to a new phase of adjustment. Low returns and tax changes are driving landlords from the market, while rising wages and low unemployment are supporting tenant demand. As a result, fresh imbalances between rental supply …
13th August 2019
Data from the English Housing Survey suggest that rising tenant demand has come from newly formed households. That could reflect more young adults moving out of their parents’ homes, and supports our view that rental growth will rise to 3.5% y/y by 2021. …
1st August 2019
Transactions fell sharply in June, but leading indicators suggest that the decline probably won’t be sustained. Indeed, assuming a no deal Brexit is avoided, we think housing transactions will fall by only 1% this year, before seeing a modest rise out to …
25th July 2019
The construction PMI fell sharply in June, but we doubt that housing starts will see a comparable decline. However, with Help-to-Buy due to be pared back, we do expect a small fall in housebuilding out to 2021. June’s CIPS/IHS Markit construction PMI …
3rd July 2019